I am still fairly new to submitting SBIR proposals and I’m not quite clear on the 50% threshold for performance requirements specifically related to matching funds.
For Phase II, a minimum of one-half (50%) of the research and/or analytical work must be performed by the proposing firm. The percentage of work is measured by both direct and indirect costs.
Example, SBIR award $750k. We expect to have an additional $750k matched by a military partner. Is the matching funds subject to the minimum performance? If it is only the SBIR funds of the $1.5M we could use up to $1,125,000 on outside consultants, but if the limitation is on SBIR + matching our limitations on outside consultants is $750,000.
Any input would be helpful in our budgeting process.
From your description, it sounds like you are applying for a Phase II SBIR with one of the DOD agencies? There is quite a degree of variation between the different components (Navy, Army, AF, etc.) so be sure to read the relevant proposal guidelines in detail for your final answer. However, in general, if you are required to have matching funds lined up for a Phase II proposal, the total amount (gov. award + matching funds) will be considered your budget and will be subject to the R/R&D spending requirements outlined by the mechanism you are applying to. There might be some flexibility in this spending requirement, but it will require prior approval from your Contracting Officer in that case.